{"id":54935,"date":"2020-09-08T06:47:16","date_gmt":"2020-09-08T11:47:16","guid":{"rendered":"https:\/\/olduvai.ca\/?p=54935"},"modified":"2020-09-08T06:47:16","modified_gmt":"2020-09-08T11:47:16","slug":"prolonged-period-of-risk-to-institutional-and-retail-investors-of-further-possibly-significant-market-corrections","status":"publish","type":"post","link":"https:\/\/olduvai.ca\/?p=54935","title":{"rendered":"\u201cProlonged Period of Risk to Institutional and Retail Investors of Further \u2013 Possibly Significant \u2013 Market Corrections\u201d"},"content":{"rendered":"<header>\n<h3 class=\"entry-title\"><a href=\"https:\/\/wolfstreet.com\/2020\/09\/07\/prolonged-period-of-risk-to-institutional-and-retail-investors-of-further-possibly-significant-market-corrections-european-market-regulator\/\">\u201cProlonged Period of Risk to Institutional and Retail Investors of Further \u2013 Possibly Significant \u2013 Market Corrections\u201d<\/a><\/h3>\n<\/header>\n<div class=\"entry-content\">\n<p><strong>European Market Regulator flags big issues, including the \u201cdecoupling of financial market performance and underlying economic activity.\u201d<\/strong><\/p>\n<p>The European Securities and Markets Authority (ESMA) warned of a \u201cprolonged period of risk to institutional and retail investors of further \u2013 possibly significant \u2013 market corrections and very high risks\u201d across its jurisdiction.<\/p>\n<p>\u201cOf particular concern\u201d is the sustainability of the recent market rebound and the potential impact of another broad market sell-off on EU corporates and their credit quality, as well as on credit institutions.<\/p>\n<p>The \u201cdecoupling of financial market performance and underlying economic activity\u201d \u2014 the worst economic crisis in a lifetime \u2014 is raising serious questions about \u201cthe sustainability of the market rebound,\u201d ESMA says in its\u00a0<a href=\"https:\/\/www.esma.europa.eu\/press-news\/esma-news\/esma-sees-high-risk-decoupling-financial-market-performance-and-underlying\">Trends, Risks and Vulnerabilities Report<\/a>\u00a0of 2020.<\/p>\n<p>Beyond the immediate risks posed by a second wave of infections, other external events, such as Brexit or trade tensions between the US and China, could further destabilize fragile market conditions in the near term.<\/p>\n<p>From a long-term perspective, the crisis is likely to affect economic activity permanently, \u201cowing to lasting unemployment or structural changes, which might have an impact on future earnings.\u201d The increase in private and public sector debt could also give rise to solvency and sustainability issues.<\/p>\n<p>In corporate bond markets, spreads have narrowed but they remain well above pre-crisis levels, owing to heightened credit risk and underlying vulnerabilities related to high corporate leverage. There was also a wide divergence across sectors and asset classes in April and May. Across non-financials, the automotive sector suffered the largest decline, followed by the energy sector.<\/p>\n<p>\u2026click on the above link to read the rest of the article\u2026<\/p>\n<\/div>\n","protected":false},"excerpt":{"rendered":"<p>\u201cProlonged Period of Risk to Institutional and Retail Investors of Further \u2013 Possibly Significant \u2013 Market Corrections\u201d European Market Regulator flags big issues, including the \u201cdecoupling of financial market performance and underlying economic activity.\u201d The European Securities and Markets Authority (ESMA) warned of a \u201cprolonged period of risk to institutional and retail investors of further [&hellip;]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_monsterinsights_skip_tracking":false,"_monsterinsights_sitenote_active":false,"_monsterinsights_sitenote_note":"","_monsterinsights_sitenote_category":0,"footnotes":""},"categories":[2],"tags":[30266,279,30267,284,1849,27230,690,4255],"class_list":["post-54935","post","type-post","status-publish","format-standard","hentry","category-economics","tag-esma","tag-eu","tag-european-securities-and-markets-authority","tag-european-union","tag-financial-markets","tag-nick-corbishley","tag-risk","tag-wolfstreet"],"_links":{"self":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts\/54935","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=54935"}],"version-history":[{"count":1,"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts\/54935\/revisions"}],"predecessor-version":[{"id":54936,"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts\/54935\/revisions\/54936"}],"wp:attachment":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=54935"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=54935"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=54935"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}